Selling beyond the 106 handle looks high probability to us...

From the top this morning, we can see that weekly buyers are bidding this market higher into a weekly resistance area seen at 105.19-107.54. On the grounds that this zone holds firm this week, the next downside target area comes in at 103.22 – a long-term weekly support level .

Thanks to yesterday’s advance, the safe-haven pair is also now seen flirting with the underside of a daily resistance area registered at 106.81-106.22. To the downside, the next area to keep a tab on is a daily support zone carved from 103.50-103.89, which sits thirty or so pips above the aforementioned weekly support level .

Stepping over to the H4 chart, however, price recently took out the 106 handle and slammed into a H4 resistance level at 106.25. As can be seen from the chart, the pair is selling off from this line. This – coupled with both the weekly and daily resistance areas bolstering this level, could potentially force this pair down to the 105 handle and quite possibly beyond according to the higher timeframe targets (see above).

Our suggestions: Seeing as it is impossible to know whether the 106 barrier will provide support, we feel the best path to take today for those who are looking to short, is to wait for a close below this number. This, alongside a retest would be sufficient (considering the higher timeframe structures) enough for our team to sell down to at least the 105 region.